A manager's effectiveness is reflected through high employee engagement, low turnover, high recruitment score, subordinate satisfaction, and low absenteeism.
An organization must identify and execute performance management measures and outline what an efficient manager definition is in its policies. Measuring performance of managers is imperative for any organization since a manager is supposed to drive and motivate the team, ensure steady growth and development, and bridge the gap between employees and the organization.
An effective and efficient manager is presumed to be skillful and expert in critical thinking, decision making, communication, playing with numbers, and project management. Yet, the managers are often held accountable and responsible for employee turnover and disengagement. Therefore, each manager's effectiveness and managerial performance measurement need to be evaluated and scrutinized continuously. Management effectiveness has different perceptions and implications in organizations. It is not merely the managerial efficiency and effectiveness that matter, but performance management measures that contribute to the overall organizational growth and success. Businesses can set performance measures for managers by defining clear-cut KPIs and aligning by efficient management definition towards organizational goals and objectives.
An organization may have several managers subject to its diversity, efficiency, and size. The fundamentals of performance measurement of managers rely on employee engagement, labor utilization, on-time project delivery, team performance, departmental growth and development, employee satisfaction, and turnover. Evaluating and correlating the measures of performance VS. measures of effectiveness against his skills, activities, attitude, and strategies will uncover and quantify the manager's effectiveness, efforts, and expertise. Businesses must invest time and energy to improve the manager's effectiveness successively. Higher employee engagement, lower turnover, higher recruitment score, subordinate satisfaction, and lower absenteeism are factors that are in direct association with a manager's effectiveness.
Organizations must establish precise goals (OKRs), KPIs, and performance management measures to optimize the manager's effectiveness. It will help you evaluate the quality and quantity of the manager's effectiveness and performance in the organization. An effective and efficient manager must fulfill his duties and responsibilities based on the expectation and goals set. Such benchmarks must be SMART.
The manager's effectiveness relies on accomplishing specific, measurable, achievable, results-oriented, time-bound goals that are scalable and challenging. Such benchmarks may include:
Measuring managerial performance must be a consistent process and policy. The definitive aim of a manager is to improve productivity and performance while balancing employee welfare and growth. There are situations where organizations rely thoughtlessly on the manager and make hasty decisions that result in disengagement and poor productivity.
Researchers state that employees generally leave their managers, not a company. Therefore, organizations must align the managerial goals and organizational goals in the same direction.
Organizations often are not quite commanding when deciding on how to measure managers’ performance. Performance measurement for managers must have a focus on the goals, vision, and objective of the organization. Managerial effectiveness can be aligned to the organizational goals by:
There is no standardized performance measurement criterion for managers due to the operational and behavioral diversity of organizations. Therefore, managerial performance measurement must be tailor-made and identified based on the organizational objectives. Businesses must set expectations for managerial effectiveness and identify traits of a good manager.
The most accepted traits of a highly effective and efficient manager are;
An effective and efficient manager plays an indispensable role in organizational success. Therefore, organizations must know how to measure managerial performance and effectiveness and examine the same at regular intervals.
Read through the below points to learn how to measure management performance and managerial effectiveness:
An effective and efficient manager will have happy employees working with him. A good manager acknowledges and recognizes the hard work, achievements, and efforts of his employees. Therefore, employees will be inclined to work more to achieve more.
A bad manager will be surrounded by disengaged employees who will facilitate absenteeism and turnover.
Managerial effectiveness is identified easily by analyzing the team performance. A motivated team under an effective and efficient manager will accomplish more, whereas a bad manager will have a group of disengaged employees who drag behind tasks.
Evaluating team performance is a managerial performance measurement tool that will disclose a manager’s effectiveness in the organization. A few factors to consider include;
The above factors speak in favor of the manager’s effectiveness. An organization must set performance benchmarks, organizational objectives, and management performance measures for a manager to perform better and be effective.
A manager’s effectiveness is evident in the performance of his team. An effective and efficient manager will nurture a bunch of motivated employees who are high-performing and productive. These employees will remain in the organization for long, as a good manager will let them grow, develop, and achieve more. Therefore, employee engagement is a crucial point in managerial effectiveness.
A bad manager will be bossy and take undue credit for the achievement and effort of his subordinates. Employees working under such a dominating manager will quit jobs, be absent from duties, be indifferent to organizational goals and objectives, and demotivate other employees.
Therefore, it is critical to evaluate the following factors to ensure managerial effectiveness in organizations.
Measuring managerial performance is effortless if you study promotions, growth, and development for a specific duration. A high-performing manager will have advancements and achievement milestones at regular intervals. An effective and efficient manager will let his team grow along with him and keep them motivated and inspired. Performance management measurement will reveal how influential and supportive a manager is.
An effective and efficient manager will always build their team and help the team grow. A manager’s effectiveness is very noticeable when he takes time to recognize, promote, recommend an increase in pay scale, and appreciate his subordinate for every milestone completed.
Managerial effectiveness is understood easily by analyzing the performance, task completion time, and delivery processes. A vibrant team under an effective and efficient manager will thrive in their projects and complete them on time. A manager’s effectiveness comes to the picture when the department stands united to complete a project in time. They will not make excuses but find ways to resolve an issue at the earliest.
Indifferent and less efficient managers will come up with many excuses and reasons for poor performances. Great managers will always plan retrospectively and accomplish their missions and prove their competency as managers. A poor manager will always worry about the volume of work and complain about his helplessness and incompetent team members.
A good manager, on the other hand, will always motivate the team and help them achieve more. He will need no more overtime and additional labor.
An effective and efficient manager always leads from the front. He will not be challenged or intimidated when assigned a complex job or a strict deadline. A great manager trusts his team and motivates the team to perform better. The group puts faith in the manager and relies on his leadership.
A great manager knows how to delegate the right tasks to the right people and improve productivity. He takes effort in building relationships and creating reliability. He loves challenges and invests time in mentoring his teammates. A great manager knows the capabilities, skill sets, and efficiency of his team members. He can create strategies and programs to bring out the best in them.
Analyze employee absenteeism to know a manager’s effectiveness. It is an old-school technique to reveal managerial effectiveness. A great manager will build a great team by mentoring, coaching, and educating them.
A bad manager will only look forward to his survival and comfort. There will be increased absenteeism, complaints, and indifference under such managers. It will adversely affect the productivity and performance of the organization and its operations.
Employees will perform better, display excellent teamwork, and collaborate easily under an effective and efficient manager. Such managers will nurture a positive culture and productive work-life balance for employees. Happy employees will collaborate more with each other and act as a team to achieve more.
A manager’s effectiveness in the organization will improve profitability, lead conversion, project completion, employee engagement, and income generation. An effective and efficient manager can identify the strengths and weaknesses of his team and use them properly to improve the overall productivity, efficiency, and performance.
How to measure management performance is no more a challenging question. The managerial effectiveness attribute directly to the team’s performance. Compare the income vs. expenditure of the organization to accumulate information about the direct and indirect expenses of a department. Comparing it with the revenue generated by the team will underline a manager’s effectiveness and efficiency in the organization.
Advanced software technologies and tools help modern organizations for measuring management performance and managerial efficiency and effectiveness. Therefore, set benchmarks for the manager and align goals in the same direction. Educate the managers on what you expect and give them liberty, authority, and confidence to perform with conviction and assurance.
Like what you read? Now see it in action in your team, book a free demo with our experts today!
The right compensation management practices and policies can make or break your employee experience. Of course, there is merit in linking compensation and performance to drive organizational success, it can lead to several questions and implementation problems as well.
Read on to get all your compensation management related questions answered.
Let’s start with the very basic question of why fair compensation is important and the merits it brings along. It is no surprise that if you are paid more and are compensated according to your efforts, you are likely to give in your 100% and stay with an organization longer. However, there are other factors that support fair compensation:
Thus, fair compensation as a part of compensation linked performance management has the potential to facilitate better employee outcomes such as engagement, experience and performance.
To make compensation fair and inclusive in all aspects, it needs to have a clear foundation. Most organizations have relied on performance reviews as a way of reflecting on performance as a means of compensation decisions. However, there are several competing views both for and against tying compensation to performance reviews.
Clearly, there are both sides to the story.
The most favorable outcome will be to keep performance as one of the parameters for compensation, but not the sole foundation.
Additionally, as one of the best practices, performance reviews can be conducted on a regular basis, where some are only developmental in nature and others can be tied to compensation management.
As discussed, focusing only on performance reviews for compensation management needs a relook. Working with growing organizations, we have curated a list of the top five performance and compensation management practices you can leverage:
Ensure that your compensation structure aligns with the market trends so your employees don’t feel underpaid and leave.
Provide complete transparency and clarity to your employees on what constitutes high levels of performance and what it will take to earn a raise or appraisal.
Have specific, well defined and measurable criteria for the compensation strategy to ensure that there is complete transparency.
Salary in hand or the pay check your employees receive is accompanied by a range of benefits that are a part of the compensation structure and cost to the company, but are often overlooked by employees. Make sure they are widely communicated.
Ensure that there is a base pay range for every role and profile with variable additions based on candidate competencies.
The idea of fair compensation and linking compensation and performance management, leads to a very interesting concept of distributive justice. On a broad level, distributive justice essentially focuses on ensuring that the compensation received by employees is fair and equitable and is based on objective and rational grounds which are uniform for all. Here are a few ways to ensure distributive justice:
Measure potential and market value of the employee in addition to experience and expertise to ensure distributive justice for high potential employees
Another interesting component of compensation and performance management that you must acquaint yourself with is pay transparency. Essentially pay transparency refers to how openly or freely employees within an organization can discuss their compensation with others.
This is not only limited to the check they take home but other perks and benefits they are entitled to. Invariably, many platforms today also enable individuals to anonymously share their salaries online and get insights from others doing the same. However, there are diverse views on when it comes to pay transparency for an organization.
Those who advocate for pay transparency believe that it can enable large scale impact for the organization across performance management.
However, there is a flip side to pay transparency too with some common pitfalls that need to be addressed proactively.
In the last section of this article, we will focus on how managers play an integral role in compensation and performance management and the best practices to guide managers to have effective compensation conversations with their team members.
Almost 58% organizations do not train managers on pay communications
This startling statistic clearly highlights how despite the apparent importance of compensation management, the focus on ensuring a seamless process is rather limited. However, organizations today can play a leading role in enabling their managers to have better pay communication and conversations by following these tips:
It is quite evident that compensation and performance management are intrinsically interlinked and if leveraged well, compensation has great potential to not only drive performance, but also facilitate engagement, retention and much more.
However, to ensure the same, you need to have a very structured, transparent and fair compensation strategy and policy. Furthermore, you must, don’t forget to invest in training your managers to bridge any gaps and constantly gauge and address employee pulse — to ensure fair compensation for all.
Talent development is critical for growing organizations which see the workforce as their biggest asset. Focus on developing their talent stack not only leads to a pleasant employee experience, it also augments the overall performance and productivity for an organization.
While you may come across many ways to facilitate talent development, leveraging the competency framework can help you move the needle very quickly.
Let's see how.
Before moving directly to how you can implement the competency framework, let’s quickly understand the 5 stages of talent development.
The first stage involves planning for your talent needs based on your organizational priorities and creating the position profile based on the skills, attitudes and other competencies.
Based on the position profile, you need to start attracting talent for the position. You can do so by spreading the word in the right networks, through job portal platforms, etc. The objective is to ensure that you are reaching out to the right network. You can also explore the right candidate for the position internally to considerably save hiring and training costs.
Once you have identified the right person, the next stage of talent development is extending the offer to the person after a thorough background check as well as a competency and expectation match. It also requires creating personalized onboarding plans for the first 30-60-90 days of the candidate’s journey within the organization. Read our guide to employee onboarding to learn more about onboarding do’s and don’ts.
The main focus of talent development starts with providing the right development and learning opportunities to your workforce. This can involve upskilling for both technical and soft skills, leadership building or any development intervention based on the need of the role and position.
Finally, talent development involves undertaking initiatives to retain your talent. While learning opportunities are important, facilitating engagement, wellness, motivation, etc. all contribute to employee retention.
If you are wondering how the competency framework aligns with talent development, you need to start by decoding what the framework actually stands for.
Put simply, a competency framework is a set of behaviors, skills, abilities and attributes that an organization considers imperative for creating a high performance culture.
The competency framework can be implemented at all stages of the talent development or the employee lifecycle within an organization. The idea is to ensure that certain core competencies are kept at the heart of the decision making that in any way impact the workforce.
Competency framework based talent development is very important for employee retention. Talent development practices when undertaken effectively have the potential to encourage team members to stay with the organization for long and at the same time become ambassadors to help attract high quality peers.
Here are the top reasons why competency framework based talent development matters:
Now that we have covered the basics of talent development and competency framework, let’s understand how leveraging the latter to advance the former can create a far reaching impact for organizations.
The first step is to create a competency framework which involves identifying the key competencies which will be instrumental in guiding all decisions around talent development. Depending on the nature of your organization, there can be categories within the competency framework that you seek to focus on. Your competency framework should focus on behaviors, skills and attributes which are critical for performance and overall success. The following steps can help you create a competency framework for talent development:
The responsibility of creating the competency framework is collective. It starts with involving the executive leadership to ensure alignment with the vision, people managers to ensure they are ideal for the culture you are trying to build and functional managers to ensure inclusion of right competencies for each role and position. Furthermore, involving those on the ground can be fruitful as they have the best idea of what competencies are critical and others which are good to have.
Once the competency framework for talent development is ready, the next step is to align it with your recruitment process to ensure precise and effective hiring. There are a few steps along the way:
The onus of implementing the competency framework during selection lies primarily with the HR team and recruiters who assess the candidates with different tests and assessments. Team managers and leaders also play a role in assessing functional competencies and fit.
Irrespective of whether an employee is onboarded before or after you have implemented the competency framework for recruitment, you need to ensure competency based performance management and development opportunities.
From a talent development perspective, the focus of the competency framework should equally be on developing employees for their next or subsequent role based on the specific competencies for the same.
The onus of aligning performance and development with the competency framework lies with team managers as they are best able to determine the performance gaps. Furthermore, employees with their managers can identify competency gaps for better performance and focus on the right learning and development interventions to bridge the same.
Finally, the competency framework must also impact the subsequent rungs of talent development where an employee moves up the ladder from one position to the next. Based on the organizational matrix and competencies for each level, you need to identify key attributes that differentiate one level from another and ensure the same is communicated to your employees.
In a nutshell, it is quite evident that the competency framework can inform and advance every stage of talent development for fast growing organizations. If you implement such a framework across the employee lifecycle, you will significantly reduce your chances of a wrong hire and will be able to nurture a workforce that aligns on the vision, goals and overall organizational culture.
A clear competency based talent development approach can help you achieve high levels of performance which is observable and measurable.
While most people managers are able to create a business case for setting OKRs as well as for the adoption of an OKR software by leveraging industry benchmarks and best practices, there is a need to explicitly decode the return on investment of using an OKR tool as well.
Unless they are able to clearly illustrate how the return achieved using a goal management software is greater than the investment, it becomes difficult to sustain the adoption and get long-term leadership buy-in.
Continue reading to strengthen your business case on the same.
Let’s quickly understand how the OKR framework is integral for an organization, especially high growth companies. Most fast growing organizations have competing priorities they need to focus on with limited resources at hand.
Therefore, simply setting goals by adopting a top-down approach without supporting parameters can lead to confusion and incompetence. OKRs help drive away this ambiguity by linking measurable key results for each objective and facilitating a collaborative approach to achieving goals.
Here are the top three benefits of implementing OKRs in an effective manner:
OKRs enable employees and leadership to have a very clear focus on what needs to be accomplished and what work is out of scope. The idea is to have complete clarity on —
The last part is extremely important as it helps create a sharp focus and set priorities straight.
93% of employees don’t really understand what their organization is trying to accomplish in order to align with their own work.
This illustrates that there is a big absence of clarity and focus amongst employees when it comes to what needs to be accomplished, which stands in the way of creating a high performance culture. Therefore, OKRs can help reduce such uncertainty and ambiguity, making it easy for the workforce to concentrate on what matters.
Taking cue from the first point, the second benefit or purpose of implementing OKRs foris a need for clarity of expectations and overall team and organizational alignment. In case of fast growing organizations, there is an overlapping of roles and responsibilities and a lack of clarity on expectations from each employee. This leads to lower than average outcomes, productivity and revenue growth and data backs the same.
97% of employees and executives believe lack of alignment within a team impacts the outcome of a task or project. Whereas, companies that regularly exceeded revenue goals were 2.3X more likely to report high levels of alignment.
By ensuring organization-wide goal visibility, OKRs help teams to decode what is expected out of each team member and their respective contribution towards achievement of the shared goals. Thus, increasing alignment and collaboration.
Finally, setting and implementing OKRs is often a collaborative process. Employees get involved in and participate during the entire OKR process and feel engaged in the same. This greater involvement and participation leads to deeper levels of engagement and ownership of key results which drive impact.
OKRs also enable employees to also gauge their performance and measure their progress in an effective manner. This motivates them to get more involved in achieving the common weekly, quarterly and annual goals. This higher level of engagement directly impacts key organizational parameters such as retention, productivity, profitability, etc.
The business case for OKRs is very clear. However, for companies that are scaling up, with limited bandwidth and competing priorities, often setting OKRs itself gets left behind due to other business priorities.
If an organization focuses on a manual approach to the OKR system, there are several steps which require a lot of time and effort including setting and writing, implementing, tracking, grading, evaluating and modifying OKRs.
Fortunately, today there are OKR tools in the market, which can help automate all of these aspects to help simplify the OKR journey. The right goal management software can help you maximize the realization of the return on investment for your OKRs. Following are the top five ways in which an OKR software makes a measurable difference on the bottomline —
First, an OKR tool can help organizations document or record the OKRs in a way that is visible and accessible to all. There is supporting evidence to show that what gets documented has a higher chance of being achieved, as what is out of sight is often out of mind.
Individuals are 42% more likely to achieve goals when they are physically recorded.
Therefore, the OKR tool can enable organizations to clearly define the business and team OKRs in a written manner which can be reflected on, seen again and again to create instant recall for employees.
OKR tools are great for creating alignment and accountability. On the alignment front, the OKR software can help achieve high levels of strategic alignment on what is the responsibility of each team member across organizations towards the key business goal achievement.
Highly aligned companies grow revenue 58% faster and are 72% more profitable than their misaligned counterparts.
The dashboard of a good OKR software can help you constantly gauge the level of goal achievement, ensure that team members are aligned on different phases as well as keep a track of when their responsibility is due. It creates high levels of transparency.
Moreover, greater alignment leads to high levels of accountability. Generally, since there is a lack of alignment on responsibilities, there is an accompanying lack of ownership and accountability, and most employees shirk away from taking accountability.
84% of the workforce describes itself as “trying but failing” or “avoiding” accountability, even when employees know what to fix.
A goal management software like SuperBeings allows you to integrate OKRs with regular meetings and check-ins to keep track of progress. Thus, driving a culture of accountability.
It is very common for companies to set OKRs and then evaluate them only at the end of the quarter/year. There is a lack of mid-term tracking which makes it difficult to gauge whether the progress is aligned with the key results or not.
40% of people that write down goals don’t check whether they’ve achieved them. Moreover, only 5.9% of companies communicate goals daily.
An OKR software can help you address this concern by facilitating day-to-day OKR progress tracking. A daily dashboard and history of 1:1 and team check-ins on OKRs, can help organizations track developments over time.
It can also help identify and resolve any performance issues that stand in the way of goal achievement preemptively. At the same time, even if organizations are tracking and monitoring OKR progress, doing so with a manual process is inefficient. An OKR tool can automate most of these processes to enable HR and people managers to spend more time on driving results.
Another major concern that organizations face when it comes to OKRs is being prepared and ready for the same. Many line managers and others struggle with writing effective OKRs. Many organizations believe setting OKRs once is enough. However, that is far from the truth.
Research says, companies that set performance goals quarterly can generate 31% more returns than those reassessing annually.
Using an OKR software can help eliminate all these challenges.
Finally, an OKR software can promote high levels of collaboration for goal achievement. For many organizations, the inability to collaborate leads to low levels of results, diminishing the ROI for OKRs.
86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures.
Using a good OKR software makes collaboration seamless by aligning cross-functional projects and tracking cumulative progress. Invariably, an increase in degree of collaboration is a direct ROI of an OKR tool which can create far reaching impact.
In this final section of the article, we will talk about the key parameters that can help you gauge the ROI of an OKR software. While the above mentioned are primary impact areas, most of them have a qualitative aspect to them.
Gauging the ROI requires backing of data points from employee experience and business results, which the following parameters can help explain.
Organizations should start by gauging whether or not transparency and alignment on goals has increased. This can be measured using employee pulse surveys to understand their opinion on how well they have visibility of goals and clarity on what they need to work towards. Therefore, the first ROI parameter for an OKR software is to identify the increase in level of transparency to ensure everyone is working in the same direction and there are no gaps or overlap in efforts.
The main purpose of an OKR tool is to facilitate the effective and efficient achievement of the goals set by an organization. Thus, the next parameter to measure ROI should revolve around the degree and time period of goal achievement.
You can start by comparing the degree of goal achievement by leveraging OKR grading to see if there is a significant improvement in percentage terms as compared to pre-OKR tool period. Second, it is important to gauge whether or not the goals/key results have been achieved in a shorter period of time or not. Since the OKR platform facilitates better alignment, collaboration, tracking, etc., it can help organizations achieve or realize the goals faster.
Third, there are several administrative overheads that accompany the setting and implementation of goals/OKRs. These include tracking, grading, etc. for managers and providing inputs on the part of employees. The ROI of an OKR software can be gauged by mapping whether or not these overheads come down.
The next parameter for ROI calculation is to measure the change or increase in revenue after the adoption of an OKR software. Since an OKR tool seeks to enable organizations to achieve their goals faster, cost effectively and to a greater extent, there should be an increase in the revenue realized.
According to Larry Page, co-founder, Google claims that “OKRs have helped lead us to 10X growth, many times over.”
Finally, gauging the value of employee parameters like retention/turnover, productivity, engagement, etc, can cumulatively be leveraged to capture the ROI of an OKR tool. There are several ways to gauge these workforce parameters, along with factors like eNPS, etc. which have a direct business impact. Calculating them can help measure the ROI of the OKR tool for an organization.
It is evident that adoption of an intelligent OKR software is not only good to have, but integral for organizational success. Using the right tool has a direct business impact which can be measured in numbers using the ROI parameters mentioned in this article.
There are both qualitative and quantitative aspects to measuring the ROI and a balanced approach to both can empower organizations to align individual performance with business goals.
If you are considering implementing the right OKR software in your business, try out SuperBeings free 21 day trial. Book today. (No credit card or commitment required)